Additional sales tax applies at the first taxable intra-State sale, not the out-of-State supplier, under rule 6.

Rule 6 of the General Sales Tax Rules, 1950 treated additional sales tax as payable by the first dealer in the State who was not exempt under section 3(3). A supplier outside the State, whose sale was beyond the State's taxing power, could not be treated as that first dealer for this purpose. Read with Article 286(2) of the Constitution and the relevant validating period, the proper point of levy remained the first intra-State sale by a dealer liable to tax in the State. The petitioner was therefore liable to additional tax, and the inter-State supplier contention failed.

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Issues: Whether, for the purpose of additional sales tax under rule 6 of the General Sales Tax Rules, 1950, the expression "the person who in the State is the first dealer in such goods" included the out-of-State supplier from whom the petitioner purchased tobacco in inter-State trade, so as to exclude the petitioner from liability.

Analysis: The liability under section 3(2) of the General Sales Tax Act, 1125, was linked by rule 6 to the first dealer in the State who was not exempt under section 3(3). A dealer whose sales were beyond the taxing power of the State could not be treated as the first dealer for the purpose of the rule. In the context of Article 286(2) of the Constitution of India and the validation available for the relevant period, the rule was construed on its own terms and not as extending to explanation sales through an outside-State supplier. The proper point of taxation was therefore the first intra-State sale by a dealer liable to tax in the State.

Conclusion: The petitioner was liable to the additional tax and the contention that the inter-State supplier was the first dealer was rejected.

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